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A Crowded Confusing Marketplace.
Posted: Thu Jul 30, 2020 9:14 am
by Kanto
So, I did things in the wrong order. I sorted out our family's investment plan before we looked into insurance!
It is a confusing marketplace in Japan. It seems everyone under the sun sells insurance, and often these products come with low-return investment vehicles tacked on.
What do we want/need? ->
Term- insurance. We just want to have coverage until our children reach adult age. (20 years).
Question? What is the sweet spot for insurance?
We are looking at insurance through my wives' work. (She is a government worker.)
Principle (My wife) - 1000万－ Month (35/40 = 1112)
Spouse (Me) - 800万 - Month (30-35 = 900 Yen)
That is the MAX for spousal payout, but the principle can go all the way up to ６０００万。
It is difficult to decide on an amount... i
Does anyone have insight? I am sure someone here sells insurance!
Re: A Crowded Confusing Marketplace.
Posted: Thu Jul 30, 2020 9:23 am
by RetireJapan
The part-time housewife/insurance salesperson is the scourge of Japan. I spent years getting rid of all the unnecessary policies my wife took on out of a sense of obligation to her friends/customers/children's classmates' mothers/old schoolfriends.
We are self-insuring now, but I had 5000万's worth of life insurance while my stepkids were in school/uni. We had a lot less saved up/invested then, and much higher financial liabilities. It was probably too much, but would have been useful if something happened to me.
Checking kakaku.com for a rough idea of prices might be good if you want to compare. In terms of how much you need, it's the old piece of string thing I'm afraid.
Re: A Crowded Confusing Marketplace.
Posted: Thu Jul 30, 2020 10:15 am
by Kanto
RetireJapan wrote: ↑Thu Jul 30, 2020 9:23 am
The part-time housewife/insurance salesperson is the scourge of Japan. I spent years getting rid of all the unnecessary policies my wife took on out of a sense of obligation to her friends/customers/children's classmates' mothers/old schoolfriends.
We are self-insuring now, but I had 5000万's worth of life insurance while my stepkids were in school/uni. We had a lot less saved up/invested then, and much higher financial liabilities. It was probably too much, but would have been useful if something happened to me.
Checking kakaku.com for a rough idea of prices might be good if you want to compare. In terms of how much you need, it's the old piece of string thing I'm afraid.
5000万 does seem like a bit much.
However, in the west, the standard calculation was (Salary * remaining working years). That does not work well in Japan.
It is just decision/analysis paralysis at this point.
Re: A Crowded Confusing Marketplace.
Posted: Thu Jul 30, 2020 12:53 pm
by RetireJapan
Kanto wrote: ↑Thu Jul 30, 2020 10:15 am
5000万 does seem like a bit much.
Ha, ha, maybe. But I had three stepkids and I didn't want my wife to have to worry about money (she's been poor before and suffered through it).
Cancelled the policy once we didn't need it anymore so no harm no foul methinks
Re: A Crowded Confusing Marketplace.
Posted: Thu Jul 30, 2020 2:41 pm
by fools_gold
Kanto wrote: ↑Thu Jul 30, 2020 9:14 am
So, I did things in the wrong order. I sorted out our family's investment plan before we looked into insurance!
It is a confusing marketplace in Japan. It seems everyone under the sun sells insurance, and often these products come with low-return investment vehicles tacked on.
What do we want/need? ->
Term- insurance. We just want to have coverage until our children reach adult age. (20 years).
Question? What is the sweet spot for insurance?
We are looking at insurance through my wives' work. (She is a government worker.)
Principle (My wife) - 1000万－ Month (35/40 = 1112)
Spouse (Me) - 800万 - Month (30-35 = 900 Yen)
That is the MAX for spousal payout, but the principle can go all the way up to ６０００万。
It is difficult to decide on an amount... i
Does anyone have insight? I am sure someone here sells insurance!
School and government workplace policies can be quite cheap and often return some of the premiums. I get about 50% back each year with my policy. To be honest, if you are young and have kids 10 million yen doesn't sound anywhere near enough. I went with 30 million, and later increased it to 50 million. Our house loan is also insured through the bank.
*Edit. I just checked and my coverage is now 30 million. I think the premiums for 50 million went up quite a bit last year because of my age.
Re: A Crowded Confusing Marketplace.
Posted: Fri Jul 31, 2020 10:24 am
by AreTheyTheLemmings?
Kanto wrote: ↑Thu Jul 30, 2020 10:15 amHowever, in the west, the standard calculation was (Salary * remaining working years). That does not work well in Japan.
How come?
Re: A Crowded Confusing Marketplace.
Posted: Fri Jul 31, 2020 1:43 pm
by Kanto
AreTheyTheLemmings? wrote: ↑Fri Jul 31, 2020 10:24 am
Kanto wrote: ↑Thu Jul 30, 2020 10:15 amHowever, in the west, the standard calculation was (Salary * remaining working years). That does not work well in Japan.
How come?
Due to the limited coverage offered, and the high costs.
However, I would love more input. I keep hearing that everyone in Japan is "overinsured" but the general consensus here seems to be more is better.
Is there a straight forward formula that is more applicable to Japan?
Re: A Crowded Confusing Marketplace.
Posted: Sun Aug 02, 2020 11:29 am
by fools_gold
Kanto wrote: ↑Fri Jul 31, 2020 1:43 pm
AreTheyTheLemmings? wrote: ↑Fri Jul 31, 2020 10:24 am
Kanto wrote: ↑Thu Jul 30, 2020 10:15 amHowever, in the west, the standard calculation was (Salary * remaining working years). That does not work well in Japan.
How come?
Due to the limited coverage offered, and the high costs.
However, I would love more input. I keep hearing that everyone in Japan is "overinsured" but the general consensus here seems to be more is better.
Is there a straight forward formula that is more applicable to Japan?
I think people in Japan are overinsured in that they buy too much unnecessary insurance. For example, smartphone insurance, cancer insurance and fancy health insurance plans with all the bells and whistles.
I'm not sure if there's a simple formula for term life insurance because it depends on your personal circumstances. In my case, my wife doesn't work and there is nobody to help out with childcare. My son is 7 years old. At the very least I'd need to have enough insurance to cover both their living expenses until my son reaches adulthood.